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FX Analysis

Short-term FX Technical Strategy (10 May 2022)

foreign exchange

EUR/USD – Maintain bearish bias for further potential decline

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Since our last report dated on 6 May 2022, the EUR/USD has traded sideways below the 1.0650 key short-term pivotal resistance. No change, maintain bearish bias for a further potential push down to retest 1.0460 (the March 2015 major swing low) and a break below it exposes 1.0410 next.

On the other hand, a clearance with an hourly close above 1.0650 invalidates the bearish tone for an extension of the short-term corrective bounce towards the next resistance at 1.0770.

GBP/USD – Dropped towards 1.2250 support; bearish elements remain intact

(click to enlarge chart)

The GBP/USD has staged the expected drop and almost hit the 1.2250 support (printed an intraday low of 1.2259 on 9 May) as per highlighted in our last report dated 6 May 2022. Bearish elements remain intact, maintain bearish bias below a tightened key short-term pivotal resistance now at 1.2490 for a further potential push down to retest 1.2250 before the next support at 1.2100.

However, a clearance with an hourly close above 1.2490 negates the bearish tone for a minor corrective bounce towards the 5 May 2022 swing high area of 1.2640/2690.

USD/JPY – Watch the 129.50 tightened key support to maintain bullish bias

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The USD/JPY has staged the expected push up as per highlighted in our last report dated on 6 May 2022. It retested the 132.25 swing high of 28 April 2022 before it staged a minor pullback yesterday.

Overall, the pullback in price actions have managed to be contained above its medium-term ascending channel support in place since 7 March 2022 low and the 89-period moving average. Maintain bullish bias with a tightened key short-term pivotal support now at 129.50 for another potential up leg to retest 131.25 before 132.00.

On the flipside, a break with an hourly close below 129.50 negates the bullish tone for an extension of the pullback towards the 5 May 2022 swing low area of 128.60/20.

AUD/USD – Broke below key 0.7000 psychological level, no clear signs of bullish reversal

(click to enlarge chart)

The AUD/USD has tumbled as expected and hit the 0.7000 key psychological/support level (also the swing lows area of November/December 2021 & January/February 2022) as per highlighted in our last report dated on 6 May 2022.

It has continued its downward momentum and recorded a daily close below 0.7000 at the end of yesterday (9 May) US session at 0.6947. Maintain bearish bias in any bounces below a tightened key short-term pivotal resistance now at 0.7090 for a further potential push down towards the next supports at 0.6870 and 0.6825/6780.

However, a clearance with an hourly close above 0.7090 negates the bearish tone for a squeeze up towards the 5 May 2022 swing high of 0.7265.

Time stamped: 10 May 2022 at 8.00am SGT

Source: TradingView

 


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